Can I Convert My Chapter 13 Bankruptcy to a Chapter 7 Bankruptcy?

If your attorney has filed a Chapter 13 bankruptcy for you, you have an absolute right to convert the case to a Chapter 7 bankruptcy.

The biggest reason that someone might convert to a Chapter 7 is because he can no longer make Chapter 13 plan payments. This could happen if the debtor becomes unemployed or disabled or otherwise has a change in income.

While a debtor’s right to convert to a Chapter 7 is absolute, there are some consequences. For example, any nonexempt property you were trying to hold onto will likely be taken by the trustee to be sold with the proceeds to go to your creditors.

The flip side is that if you stop making plan payments without converting, your bankruptcy will be dismissed and the creditors will be back at your door. If you’re having trouble making your plan payments, talk to a bankruptcy attorney right away.